Public Statements

Responding to Seniors' Needs and Improving Medicare Choices

Statement

For far too long, our nation's seniors and people with disabilities have seen their health care program used as a piggy bank to fund the creation of new programs for others. Rather than ensuring Medicare remains solvent and successful for today's more than 50 million beneficiaries and for future generations, the Affordable Care Act diverted $716 billion from Medicare to fund the largest expansion of Medicaid in history and the creation of yet another entitlement program. This $716 billion raid on Medicare could exacerbate beneficiaries' existing challenges in accessing the health care providers of their choice and weaken private Medicare options such as the Medicare Advantage (MA) program -- which today covers more than 14 million Americans.

The current Medicare program structure is unsustainable and will threaten current beneficiaries' health security if not addressed. We believe the best long-term solution is to allow for increased plan options in the Medicare program that provide seniors the Medicare benefit they receive today, while reducing costs and improving the quality of care.

We can take measured, short-term steps to strengthen Medicare for America's seniors by focusing on policies that have had long-standing bipartisan support from a wide range of policymakers, health experts, and economists. At the very least, Congress should come together to strengthen the program by: (1) fixing the Medicare physician payment system; (2) improving the program's benefit structure to provide seniors a more seamless Medicare coverage; (3) protecting the sickest seniors from medical bankruptcy; (4) reducing subsidies for high-income earners; (5) improving the program's private sector options; (6) reforming the medical liability system; and (7) eliminating waste, fraud, and abuse. Working closely with the House Ways and Means Committee, the Energy and Commerce Committee will further these efforts to protect seniors and place the Medicare program on sound financial footing.

1. Fix the Medicare physician payment system so seniors can see the doctor they choose.

An essential step in strengthening Medicare for beneficiaries is ending the uncertainty created by the Sustainable Growth Rate (SGR) formula currently used for Medicare physician payments. For over a decade, seniors and physicians have been subject to increased uncertainty as Congress has used monthly or annual patches to avert increasingly draconian reductions in Medicare payments resulting from the flawed and outdated SGR formula. Surveys have shown that the uncertainty around the SGR has caused physicians to stop accepting Medicare beneficiaries. The Committee proposes repealing the SGR and replacing it with a fiscally responsible reform of Medicare's physician payment system that ensures America's seniors and those with disabilities can use their Medicare cards to see their own doctors. To achieve this goal, collaborative efforts are underway with the Ways and Means Committee to develop meaningful reforms.

2. Provide a more seamless transition into Medicare.

For decades, the Medicare structure has led to confusion and anxiety for beneficiaries. The division between Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) reflects the health insurance system of the 1960s - unfamiliar to most Americans and does not look or operate like current insurance plans - which combines medical services into one benefit package. Since we do not give seniors 1960s health care services, we should no longer provide them with a 1960s health insurance product. The Energy and Commerce Committee proposes to provide a modernized insurance design by streamlining the program's cost-sharing structure - unifying the deductibles for Medicare Parts A & B under one threshold. By streamlining cost-sharing and deductibles, beneficiaries may see less need to purchase some types of supplemental coverage, further simplifying their health care coverage. The committee will review reforms to modernize the Medigap program to ensure seniors have the incentive to make better healthcare choices and reduce Medicare costs over time.

3. Protect the sickest beneficiaries from medical bankruptcy.

Medicare's unpredictable out-of-pocket costs coupled with the threat of unlimited medical charges makes beneficiaries fear, and sometimes experience, the personal and financial devastation of medical bankruptcy. The Committee proposes to end this confusion and fear by creating a catastrophic cap on Medicare expenditures to protect seniors from bankruptcy because of unexpected health care costs, further reducing the need for some types of supplemental coverage. Such a policy, coupled with the simplification of deductibles for Medicare Parts A & B mentioned above, offers beneficiaries a more predictable and simplified cost-sharing structure.

Our Medicare program is a significant component of Americans' retirement security, and one that is essential to the most vulnerable seniors. However, without improvements, the program's approaching insolvency is undeniable. Under the current Medicare program, high-income earners pay an additional premium amount for Medicare Part B and Medicare prescription drug coverage. President Obama has supported an expansion of income-related premiums under the Medicare program. The Energy and Commerce Committee will examine how the current means-testing framework is affecting seniors, explore whether additional steps can be taken to focus resources on those seniors with the greatest need, and reassess the voluntary nature of the program to determine whether additional flexibility can be offered -- while protecting the program that seniors depend on -- in order to reduce spending and ensure the financial viability of Medicare for future generations.

We should strengthen and protect the private market options in Medicare that are clearly working to improve beneficiary access to quality care and that actually reduce costs for beneficiaries and the overall program.

The Medicare Advantage (MA) program (Medicare Part C) has been a valuable choice for over 14 million beneficiaries (many of whom are minority or low-income disadvantaged seniors). MA plans offer these beneficiaries customized and supplemental benefits like vision, dental, and chronic disease management programs that improve the quality of care, fill in gaps in service, and reduce out-of-pocket costs. Yet today, the viability of MA is at risk due to deep cuts of more than $300 billion taken from the program to fund the Affordable Care Act's creation of other entitlements. The Committee will work to preserve the choices and benefits offered to seniors through MA.

The Medicare Prescription Drug Program (Medicare Part D) has been a true public-private partnership success in improving care and keeping costs down for seniors.[1] Under Part D, private insurers compete for seniors' business by offering different drug coverage plans, and this competition has helped limit costs for the more than 35 million Medicare beneficiaries enrolled in prescription drug plans. The Committee remains opposed to any policies that could insert government price controls or further the government's interference with negotiations in the Part D program. Moreover, the Committee remains committed to protecting beneficiaries from any policies that could weaken these two private market Medicare programs and is exploring how to strengthen both programs to ensure their viability in the future.

6. Reform the medical liability system to end junk lawsuits and stop enriching trial lawyers.

The nation's medical liability system is broken, and it has imperiled patient access to healthcare and imposed tremendous costs on consumers and our nation's federal health care programs, including Medicare. The broken system has forced doctors out of practice and caused sites of care to close, including some of our nation's trauma centers. We need to enact comprehensive medical liability reform in connection with our federal health care programs that will improve seniors' access to quality care while reducing overall Medicare costs.

7. Eliminate waste, fraud, and abuse to reduce costs for our nation's current seniors, while strengthening the program for future generations.

The federal government needs to do a better job of safeguarding every Medicare dollar so that it can be used to care for all Medicare beneficiaries. Unfortunately, too often Medicare dollars are lost because the federal government has failed to take the steps necessary to ensure these funds are protected against waste, fraud, and abuse. For more than a decade, Congress has sought to reduce the waste, fraud, and abuse of Medicare resources, yet the problem persists. Key recommendations of government watchdogs such as the Government Accountability Office (GAO) have been ignored, while the Centers for Medicare and Medicaid Services (CMS) has allowed -- and in some instances established -- institutional roadblocks that inhibit some anti-fraud efforts. As a starting point for sustainable, long-term improvements, the Energy and Commerce Committee will solicit comprehensive recommendations from government watchdog groups and others that could become the basis for bipartisan, structural reforms to Medicare and to the operations of CMS in how it conducts its waste, fraud, and abuse efforts.